The Hedge | Brutal Honesty Over Hype Since 2008
California’s population peaked in 2020 and has been declining since. The state lost a congressional seat after the 2020 census for the first time in its history. The outmigration of both residents and businesses has been documented extensively, and the destinations are not random — they reflect a rational response to the cost and regulatory differential between California and its competitors.
The Migration Data
Between 2020 and 2024, California had net domestic outmigration of approximately 500,000 people per year — more people leaving for other states than arriving. The domestic outmigration reflects the revealed preferences of people with mobility and choices: they are leaving. Business departures follow a similar pattern. The California Policy Center tracked over 300 significant corporate relocations or expansions to other states between 2018 and 2024. Oracle relocated from Redwood City to Austin. Hewlett Packard Enterprise moved from San Jose to Houston. Charles Schwab from San Francisco to Westlake, Texas. McKesson from San Francisco to Irving, Texas. CBRE Group from Los Angeles to Dallas. These are large, sophisticated enterprises making deliberate, well-analyzed operational choices.
The Destinations
Texas receives the largest share: no state income tax, lean regulatory environment, low cost of commercial and residential real estate, and a political and business culture that actively courts relocating companies. Austin, Dallas-Fort Worth, and Houston have established themselves as viable alternatives to California’s major metros. Florida is the second most common destination, particularly for finance, wealth management, and technology — Miami has attracted Citadel, numerous hedge funds, and technology companies. No state income tax and a substantially less burdensome regulatory environment. Nevada attracts California companies primarily for tax reasons — no state income tax, geographically proximate to California markets. Arizona, particularly Phoenix and Scottsdale, has absorbed significant California migration from both residential and commercial categories.
What Remains in California
California is not emptying out. Companies with genuine California-specific advantages — the Bay Area’s AI research talent concentration, Hollywood’s entertainment ecosystem, San Diego’s biotech cluster, the venture capital infrastructure — are not leaving in significant numbers. What is leaving is everything else: companies for whom California provides no distinctive advantage but imposes full cost and regulatory burden. This is the proper way to think about the California exodus: it’s a self-selection process. Companies that genuinely need California are staying. Companies that don’t need California but are paying California’s costs are leaving when the premium becomes large enough to motivate the move. For founders at the earliest stages, the lesson is to make the California decision analytically rather than by default — before you’ve accumulated years of California-specific infrastructure that make moving harder.
The Hedge has been cutting through financial and business noise since 2008. Brutal honesty over hype — always.
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